Grooveshark announces deal with Sony/ATV

Following its settlement with EMI Music Publishing earlier this month, controversial streaming service Grooveshark says it now has a deal in place with the EMI publishing business’s sister company Sony/ATV.

As previously reported, although Grooveshark has always had a shaky relationship with the music industry, it did agree a deal with EMI pretty early on, which covered both the recording and music publishing catalogues of the then UK-based major. However, before the two sides of the EMI company were split up and sold off, that partnership collapsed, and new litigation between EMI and Grooveshark began.

But earlier this month the legal dispute between EMI Music Publishing and Grooveshark was settled, and a licensing deal agreed. The EMI publishing company, of course, is now controlled by Sony/ATV, which led a consortium of buyers to acquire the EMI songs business last year. And, it would seem, by settling its dispute with EMI Publishing, that has enabled Grooveshark to do a deal with Sony/ATV too.

Announcing the new arrangement, Grooveshark CEO Sam Tarantino told reporters: “We are excited to add Sony/ATV Music’s impressive array of songwriters to our catalogue further advancing our mission to empower creators with the best audio platform in the world”.

Grooveshark has long annoyed many in the industry by allowing users to upload music to its servers, meaning that it routinely makes available large numbers of tracks without the appropriate licences.

The Grooveshark company insists that it operates a takedown system in line with its obligations under US copyright law, and therefore is a legitimate business, though the major record companies – which are all currently suing the digital firm – say that the streaming set up is simply exploiting a loophole in American law.

Whether having a deal in place with the biggest music publisher in the world – ie the combined Sony/ATV and EMI Publishing – means Grooveshark could now finally do deals with the major record companies remains to be seen.

It’s been assumed for sometime that Universal in particular would rather see Grooveshark go out of business, and is therefore possibly employing the LimeWire strategy: pursue long drawn out infringement litigation, refuse to negotiate, and wait.

The majors know that Grooveshark is operating in an increasingly competitive market place, and likely needs new and major investment to succeed, something it will be much harder to secure while big copyright litigation hangs over the business.